Islamic securities from the oil-rich Persian Gulf notched their longest weekly winning streak since February 2021 last week as investors shrugged off plunging crude prices, instead turning their attention to imminent Federal Reserve easing.
A Bloomberg gauge of sukuk returns for the six-nation Gulf Cooperation Council posted its 11th successive week of gains, while hitting an all-time high on Friday. The certificates have handed investors 3.9% gains this quarter even as oil and gas prices tumbled more than 17%, to trade near three-year lows.
With a decision from the US central bank just days away, fixed-income instruments around the world are preparing for a lower interest-rate regime with widespread yield declines. A rate cut could boost risk appetite and push investors to snap up assets across emerging markets.
GCC countries — Saudi Arabia, United Arab Emirates, Oman, Kuwait, Qatar and Bahrain — are witnessing rallies in their dollar bonds and sukuk, with the Islamic-compliant securities outperforming global bonds this year as their fiscal and political stability make them some of the safest in the developing world.
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